CAP 2013 – EU risks missing golden opportunity to modernise CAP

In the latest in a series of exclusive articles for Endeavour Public Affairs about the rural economy and the 2013 reforms of the Common Agricultural Policy (CAP), Gail Soutar, the National Farmers Union’s (NFU) chief adviser on the CAP states that the EU is alive with talk over the size of its long term budget. Given that the CAP makes up about 40 per cent of the budget it too has been the centre of debate. In her article, she explains why farmers would be happy to see the CAP reduced – but with some provisos.

Farmers would like to live without the Common Agricultural Policy (CAP) – you heard it here first. They would also like the markets to genuinely reflect the balance between supply and demand, they would like retailers to play fair with their suppliers, they would like to grow crops without floods, droughts or disease, and to have enough profit left over at the end of each year to re-invest in growing their businesses on the one hand, and making space for nature on the other.

Sadly, the real world in which we farm is not much like that. Markets are distorted by trade barriers and differing standards, retailers wield a disproportionate share of power in the supply chain, our climate is increasingly prone to extremes, and, but for the CAP, farmers would not have anything left over for reinvestment or the environment.

But that is not to say the CAP should not be reformed – indeed it must continue down the reform path it has set out on. We live in an unstable world stalked by food shortages, food price inflation, climate change, and diminishing resources. We need a policy that will drive efficient farming to feed a rapidly growing population and can deal with the challenges farmers face.

That is why we see the current round of CAP reform – which comes around every seven years – as an opportunity to simplify the policy, to make it more market orientated and to help farmers become more competitive. Ultimately we see it as a chance to make farmers less reliant on EU money and more reliant on the market to make a living.

Unfortunately the European Commission did not see things in quite the same way. In fact the Agriculture Commissioner, Dacian Cioloş, has a plan that I fear will take our industry backwards. It includes complicated measures to couple farm payments to certain types of production – an initiative our farmers jettisoned years ago in favour of producing according to what the market needs. It also includes new rules to provide special payments to small farmers and young farmers, when what these farmers actually need is a vibrant and competitive industry.

At the heart of the Commission’s thinking is the so-called “greening” of single payments. I have nothing against green agriculture. In fact I am proud of our record in England where almost three quarters of farmland is part of a voluntary agri-environment scheme which helps to provide habitats for wildlife and to maintain the natural environment. Further to that our farmers have cut nitrogen application rates by 30 per cent since 1987; 44 per cent of all cultivated land is now managed with zero or minimum tillage; nearly a quarter of farmers planted new hedges in 2009 alone; and the industry has cut greenhouse gas emissions by 22 per cent on 1990 levels. But given the increased food demand, we need to make sure green measures can work alongside productive agriculture. That is where the Commission proposals fall down by calling for seven per cent of land to be taken out of production and for land to be fossilised as grassland, irrespective of the environmental benefit.

The Commissioner says he needs these greening measures to make the CAP more acceptable to the taxpayer. In tough economic times I would agree that it is essential to justify the cost of the CAP, whatever the size of the final budget. But surely our strongest argument is that the policy helps provide affordable, high quality food produced to world class animal welfare and environmental standards?

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